Green Markets: Often a Lost Opportunity for Developing Countries

The report analyzes the potential for developing countries to leverage 'green markets' for sustainable products, focusing on Chilean exports of organic wine and certified forestry products to the European Union. It tests hypotheses regarding the existence of 'green industry havens' in importing countries and a lack of domestic capacity in Chile. The findings highlight significant non-tariff barriers, including complex certification requirements, high costs of conversion and auditing, and a lack of systematic market information. While the forestry sector shows more success through international schemes like FSC and PEFC, the organic sector struggles with a lack of a recognized national certification system and significant EU subsidies that distort competition. The report recommends coordinated government strategies, the creation of a Sustainable Trade and Innovation Centre, and the pursuit of mutual recognition agreements for certification standards.

• The global market for organic agricultural products was estimated at approximately US$20 billion in 2000, with growth rates between 5% and 40% depending on the country.
• Developing countries lack a significant share of organic production compared to industrialized nations; in most developing countries, organic production does not exceed 0.5% of the total agricultural area, whereas in industrialized countries it ranges from 1% to 18%.
• Chilean organic wine exporters face a significant barrier due to the absence of an internationally recognized national certification system, forcing them to rely on case-by-case import authorizations and certificates from companies approved by the importing EU countries.
• Conversion to organic wine production in Chile involves higher direct costs—approximately a 20% increase from US$850 to US$1,100 per hectare annually—driven by increased labor for weed control and a potential yield drop of up to 30%.
• Certification costs for organic wine producers in Chile typically range between US$1,500 and US$2,500 per year, increasing to US$4,000 for complex operations, which represents a 25% increase in production costs for vineyards smaller than 10 hectares.
• EU agri-environmental subsidies for organic farming can be substantial, with an estimated €26 billion spent between 2000 and 2006, potentially distorting international competition.
• In the forestry sector, the demand for certified products in the EU grew rapidly from 0.2% in 1998 to 8% in 2000, largely driven by pressure from NGOs and retailers like Home Depot.
• Chilean forestry companies primarily use international schemes; eight companies (58% of plantations) hold ISO 14001 certification, while five companies (7% of productive forests) are FSC certified.
• The report identifies 'green industry havens' in the organic market, where entry barriers such as complex certification, lack of information, and high subsidies for EU home producers reserve the market for domestic producers.

APA

Borregaard, N., G., G. G., Dufey, A., & de Guevara, J. L. (2002). Green Markets: Often a Lost Opportunity for Developing Countries. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/tkn_green_markets.pdf

Chicago

Borregaard, Nicola, Guillermo Geisse G., Annie Dufey, and Juan Ladron de Guevara. Green Markets: Often a Lost Opportunity for Developing Countries. International Institute for Sustainable Development, 2002. https://www.iisd.org/system/files/publications/tkn_green_markets.pdf.

Wikipedia

{{cite report |last1=Borregaard |first1=Nicola |last2=G. |first2=Guillermo Geisse |last3=Dufey |first3=Annie |last4=de Guevara |first4=Juan Ladron |title=Green Markets: Often a Lost Opportunity for Developing Countries |publisher=International Institute for Sustainable Development |date=July 2002 |url=https://www.iisd.org/system/files/publications/tkn_green_markets.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{borregaard2002green, author = {Borregaard, Nicola and G., Guillermo Geisse and Dufey, Annie and de Guevara, Juan Ladron}, title = {{Green Markets: Often a Lost Opportunity for Developing Countries}}, institution = {International Institute for Sustainable Development}, year = {2002}, month = jul, url = {https://www.iisd.org/system/files/publications/tkn_green_markets.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }